FCC Schedules CAF II Webinar

Attention cable ops looking to get a piece of the broadband subsidy pie, the FCC has scheduled a webinar for Sept. 11 on proposed bidding in the Connect America Fund II (CAF II) auction.

Among the topics on the agenda are proposed application procedures, bidding procedures, and how support amounts are determined.

The largest incumbent price cap carriers—AT&T, Verizon, CenturyLink—declined about $2 billion in CAF II support for building out broadband to high-cost, generally rural, areas, in 20 states, so the FCC is opening that pot of money up to competitors, like cable broadband providers, via auction.

All that money is coming from the Universal Service fund for high-cost, mostly rural, areas for which there is no business case for building out broadband absent that subsidy.

In February the FCC voted to establish rules for handing out the money and last month sought comment on how it should structure the bidding, with comments due by Oct. 18. The webinar is to help guide that input by giving interested stakeholders a clearer picture of the proposed process.

The CAF II auction is scheduled to begin next year.

The idea behind the auction is to get the most bang for its subsidy buck by getting high-speed broadband to unserved areas for the lowest level of subsidy the marketplace will support. It will be a "descending clock" auction similar to the reverse portion of the broadcast TV spectrum auction FCC Chairman Ajit Pai has said he is trying to balance deployment with cost containment by giving more weight to bidders offering higher speeds, higher usage allowances and lower latency, regardless of the technology they use, but with an eye toward getting to as many consumers within a budget for rural Universal Service Fund support.

The idea, said the chairman after the February vote, is to incentivize new entrants to bid for the support, including "competitive entrants like wireless internet service providers, small-town cable operators, and electric utilities."

But fellow Republican Michael O''Rielly, who had strong reservations about various parts of the auction, said it puts unreasonable penalties on latency and took issue with the various weighting decisions, saying they were rushed and "with little to no factual basis.”

He also said the FCC could wind up spending a disproportionate amount on services it can't afford, echoing his past criticism that the FCC should "buy fewer Lamborghinis and more Chevys."